Starting today, the National Payments Corporation of India (NPCI) is ushering a revolutionary development through its instant, 24 x 7 inter-bank fund transfer transactions and you can do it through your mobile phone. You can now access your bank accounts and remit funds or make payments at shops and commercial establishments. A.P. Hota, the soft-spoken Chief Executive Officer, who has managed, with his team, to successfully bring in a whole new era in banking spoke to Robin Shukla. And ‘wow’, it promises to be a great new way to manage money.
What exactly is IMPS?
Until now, the various banks in the country that were providing customers with remittance facility through their mobile banking platforms had been working under constraints of time, since payment requests were being processed and settled in batches between 9 am and 7 pm.
However, the Interbank Mobile Payment Service, or IMPS, is an instant, 24 x 7, inter-bank electronic fund transfer service through mobile phones, available for all 365 days of the year. Customers can now use their mobile handsets to access their bank accounts and remit funds or make payments at shops and commercial establishments. The finest aspect about it is inter-operability, across all banks, telephone companies, and from virtually all handsets.
Sounds revolutionary… Most of us have cell phones and bank accounts. So how do we get on board?
IMPS would require the following situations in place: A Remitter (Sender) and a Beneficiary (Receiver). Both the parties should have bank accounts, that too in a bank that is a member of National Financial Switch (NFS) driven by NPCI.
If you are going to operate as a Remitter:
* You will first have to register yourself for mobile banking service with your bank.
* The bank will then provide you with a unique Mobile Money Identifier (MMID) and
MPIN (Mobile Personal Identification Number).
* You will next need to download the software application for mobile banking, or use
SMS facility if your bank provides IMPS via SMS.
Is there a separate formality for a Beneficiary or Receiver?
There is always a chance that a customer would want to restrict his interaction and transactions to just receiving money into his/her account rather than paying it out. In such a case:
* The customer has to approach the bank and register the mobile number to the particular account.
* The bank will provide the MMID
* The mobile number and MMID have to be conveyed to the Remitter so that funds can be paid in.
This sounds simple, sir. But what happens next?
It really is extremely and unbelievably simple. For sending money, as a Remitter you have to login to the downloaded application and select the IMPS menu from the IMPS or use SMS facility if the bank is providing the same. Enter the Beneficiary’s mobile number and MMID, the amount to be paid, and your MPIN. Voila! You will promptly receive a confirmatory SMS advising you of the debit in your account and credit to the Beneficiary’s account. All in a matter of seconds! There will also be a transaction reference number, which you are well advised to note for any future reference or query.
That means the Beneficiary will actually receive money into the account in a matter of seconds?
Precisely, it is that simple and quick. That’s why I added the word instant before Interbank Mobile Payment Service. A Beneficiary will also similarly receive the SMS confirming credit of money into his/her account from the Remitter. And this money can be used immediately on being credited.
What is the role of NPCI in all this?
The Remitter sends instructions from his/her mobile through his/her bank. The remitting bank validates the details of the remitter, debits the account and sends the transaction to NPCI.
Transaction is passed by NPCI to the beneficiary bank. The beneficiary bank validates the details of the beneficiary customer, credits the account, sends confirmation to NPCI about the transaction status and sends sms to beneficiary informing him/her of the credit.
NPCI sends the transaction status to remitting bank which in turn informs the status to the Remitter, through a confirmatory SMS.
This is going to change many basics of the way we do our banking. Which are the banks offering IMPS?
Currently, we have seven banks already offering IMPS – State Bank of India, ICICI Bank, Union Bank of India, Bank of India, Yes Bank, Axis Bank, HDFC Bank.
They will shortly be joined by Citibank, Barclays Bank, Standard Chartered Bank, Corporation Bank, Vijaya Bank, Kotak Mahindra Bank and Development Credit Bank Ltd (DCBL).
Apart from these, there are more than twenty other banks in the preliminary stages of getting linked. Of course, all banks should have approval from RBI for Mobile Banking Service, apart from being members of NFS like I stated earlier.
Now, comes the sensitive part. We are wary of our money ending up in the wrong account. It could be impossible to recover from cyberspace. Is there a mechanism to prevent it?
The chances of any such thing happening are nil. As a remitter, in addition to the mobile phone number of the Beneficiary, you have his/her seven digit MMID, which is unique and exclusive only to his/her particular account in a particular bank. Nobody else in the entire banking community will have the combination of the mobile number with the corresponding MMID number. To top this, you have your own MPIN. In case what you type in does not match anywhere, because of any wrong digit whatsoever, the transaction simply won’t happen… Period. The money will never ever go into a wrong account.
What if the mobile phone gets lost? Can anyone else operate and make remittance via IMPS?
The bank will have provided the customer with the MMID and the MPIN. No IMPS operation is possible without these two inputs which will remain only with the original customer.
Will this get complicated if a person has more than one account in a bank?
The methodology being employed by NPCI is fool proof. In case a customer has more than one account linked to his/her mobile number, the bank will allocate a separate MMID for each account. The customer can select the right account by using the MMID allocated for it, be it for remitting or receiving funds. The same applies for a customer who has more than one mobile number or wishes to change the mobile number. He will have to get in touch with the bank and provide the appropriate mobile number or numbers. In case of change, he has to intimate the bank and the new number will get registered for future activity.
Can we go ahead and do international transactions?
For the moment the facility is only domestic. We have yet to initiate any plans for cross-border transactions.
Is there any upper limit to the value of transactions? What about service fee?
As per RBI guidelines governing mobile payments, the customer can transact on IMPS subject to a daily cap of Rs.50,000 per day for both, fund transfers and transactions involving purchase of goods and services, in the case of encrypted messaging formats. For unencrypted messaging formats, the limit is Rs.1,000. As regards service charges, for the moment, until 31st March 2011, there is absolutely no cost involved. Thereafter, the charges could be as little as 25 paise per transaction, regardless of value involved.
How do you view this product one year down the line?
All NFS banks will be on board. We are talking of about 320 million customers. This is probably the biggest single operation worldwide. Mobile enabled payment is happening in various countries, but IMPS is probably the most comprehensive exercise. We plan to cover the no frills sector of persons enlisting for primary services by providing connectivity through travelling business correspondents. The modalities are still to be worked out. A major dream is to cover the unbanked sector – through the UID Adhar Electronic Payment system. Again the modalities have to be worked out. What we ultimately hope to provide is safe, secure and easy to use state-of-the-art technology.